Bitcoin prices retreated Wednesday afternoon amid speculation that a long-dormant block of coins, with links to the presumptive creator of the virtual asset, just changed hands.
A Twitter account set to issue tweet alerts when coins tied to certain addresses trade, indicated a trade of a batch of virtual currency that is “possibly” tied to Satoshi Nakamoto, the person or persons who wrote the software code for the digital currency back in 2009. The identity of Nakamoto has long been speculated on but the originator of bitcoin has never been verified.
About 11 years ago, he created, or mined, the original batch of bitcoins that are widely known as the genesis block.
The tweet suggests that the batch of some 40 or 50 bitcoins that changed hands on Wednesday were mined within the first month of the creation of bitcoin.
To be sure, the anonymous nature of the bitcoin makes it impossible to know the owner of the coins but the technology that underpins bitcoin makes tracking addresses of the certain blocks of coins possible.
Sleuthing for coins tied to the progenitor of the digital asset has become a regular pastime in the crypto community. Tracking big blocks of bitcoin also helps to understand the habits of those who hold substantial influence on bitcoin prices by dint of their holdings.
Bitcoin futures, representing a single bitcoin, were off 1.3% in Wednesday afternoon, with the most-actively traded May BTCK20, +1.10% BTC.1, +1.10% at $9,550, while bitcoin spot prices BTCUSD, +0.97% were off 1.8% at $9,525, according to data from CoinDesk.
Bitcoin futures are up more than 32% so far in 2020, and they had been trading at an intrasession peak at $9,895 on Wednesday before settling lower.
A number of industry participants have pointed out that the fact that the bitcoins are 2009 vintage doesn’t necessarily mean that they are related to Nakamoto.
However, that didn’t stop interest in bitcoin surging on Twitter, with the term “satoshi” becoming a viral term on the social-media platform Twitter Wednesday afternoon.
Bitcoin was created as an alternative payment system 11 years ago, one that operated anonymously and peer-to-peer, eliminating the so-called trusted third party.
The cryptocurrency was born amid worries that modern currency is manufactured by central banks printing fiat money to boost economic growth—a view that has gained increasing traction amid the COVID-19 pandemic.
Proponents of bitcoin argue that because the digital asset is decentralized from central banks or governments, individuals can conduct transactions without an intermediary. That is part of the appeal of bitcoin.
However, the nascent asset hasn’t made significant headway in price since hitting a December 2017 peak near $20,000.
Critics also point to the cryptocurrency’s association with money laundering as one of its biggest drawbacks. So far, bitcoin hasn’t achieved sufficient scalability to make it a legitimate currency much less a store of value, other opponents say.
That said, bitcoin has managed to hold its own compared with gold thus far this year, with gold futures GC00, +0.77% up 15% in the year to date. By comparison, the S&P 500 index SPX, -0.77% is down 8.1% so far this year and the Dow Jones Industrial Average DJIA, -0.41% are off nearly 14% after a coronavirus-induced downturn virtually brought the equity markets to their knees in March.